VANCOUVER, Nov. 8, 2018 /PRNewswire/ - Entrée Resources Ltd. (TSX:ETG; NYSE American:EGI – the "Company" or "Entrée") has today filed its interim financial results for the third quarter ended September 30, 2018. All numbers are in U.S. dollars unless otherwise noted.
Q3 2018 HIGHLIGHTS
Entrée/Oyu Tolgoi JV Property – Mongolia
On November 1, 2018, Turquoise Hill Resources Ltd. ("Turquoise Hill") provided the following update on underground development on the Oyu Tolgoi mining licence. The Oyu Tolgoi project includes two separate land holdings: the Oyu Tolgoi mining licence, which is held by Entrée's joint venture partner Oyu Tolgoi LLC ("OTLLC") and the Entrée/Oyu Tolgoi JV Property, which is a partnership between Entrée and OTLLC:
•During Q3 2018, underground lateral development progressed 3.0 equivalent kilometres for a cumulative total of 15.7 equivalent kilometres since project restart. Until the completion of Shaft 2, Oyu Tolgoi is expected to experience similar, but not increased, development rates as seen in Q3 2018.
•By the end of 2018, underground development is expected to have completed approximately 11 kilometres of equivalent development through a mixture of mass excavation and lateral development.
•During Q3 2018, Shaft 2 collar doors and controls were commissioned and mechanical installation of the rock breaker on the shaft's jaw crusher was completed. Also, development of the convey-to-surface decline continued to progress with the permanent ventilation facility being commissioned and becoming operational.
•Rio Tinto International Holdings Ltd. ("Rio Tinto"), in its role as manager of Oyu Tolgoi, has undertaken its second annual schedule and cost re-forecast for the project and, based on preliminary results, has notified Turquoise Hill of a delay to achievement of sustainable first production from the Oyu Tolgoi mining licence which is now expected to occur by the end of Q3 2021 instead of Q1 2021. This is a result of certain delays including, but not limited to, the completion of Shaft 2, which includes over four months of schedule contingency, and challenging ground conditions. At this time, Entrée has no information to suggest that this will impact timing of future development or production schedules on the Entrée/Oyu Tolgoi JV Property.
•First draw bell remains on track for mid-2020, partly due to a change in the draw bell sequencing strategy.
•Per the Oyu Tolgoi Investment Agreement, OTLLC has been exploring two domestic power options – a power plant built and operated by OTLLC at the mine site or an independent power producer located at the Tavan Tolgoi coal field. A final decision on the outcome, cost and financing of a domestic power supply has not been concluded.
•Q3 2018 net loss was $0.4 million which was an increase compared to Q3 2017 ($0.1 million) due mainly to foreign exchange variances on the cash balance. For the 2018 year to date, net loss was $1.2 million which is a reduction of 43% compared to the same period of 2017 ($2.1 million). The reduction in the year to date net loss was due to the sale of the Company's 0.5% net smelter returns royalty on the Cañariaco project in Peru in Q2 2018 and lower administration costs in the current periods.
•Q3 2018 operating cash outflow after working capital was $0.2 million as compared to $0.6 million in Q3 2017 and for the 2018 year to date, operating cash outflow after working capital was $1.0 million compared to $2.4 million in the same period of 2017. The reduction in operating cash outflow after working capital was due to lower net losses in the current periods.
•The cash balance as at September 30, 2018 was $6.0 million.
OUTLOOK AND STRATEGY
Entrée/Oyu Tolgoi JV Property
With the completion and filing of its updated technical report titled "Entrée/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report" with an effective date of January 15, 2018 prepared by Amec Foster Wheeler (the "2018 Technical Report") in Q1 2018, the Company is now focused on:
•Assessing opportunities to crystallize value ahead of production from the Entrée/Oyu Tolgoi JV Property.
•Streamlining Entrée's joint venture interest.
•Educating the market about the opportunities associated with Entrée's interest in the Entrée/Oyu Tolgoi JV Property.
•Working with Entrée's joint venture partner to advance any exploration opportunities on the Entrée/Oyu Tolgoi JV Property that may exist, including several near surface targets that have been identified.
•The Company remains focused on maximizing investor awareness of the results of the 2018 Technical Report and what this report means to the Company and all stakeholders, both current and potential.
•Corporate costs, which include Mongolian site management and compliance costs, remain estimated to be between $1.2 million and $1.5 million for the full 2018 year.
The Company's interim financial statements and Management's Discussion and Analysis ("MD&A") are available on the Company's website at www.EntreeResourcesLtd.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Robert Cinits, P.Geo., Entrée's Vice President, Corporate Development, a Qualified Person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has approved the technical information in this release. For further information on the Entrée/Oyu Tolgoi JV Property, see the Company's Technical Report, titled "Entrée/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report", with an effective date of January 15, 2018, available on SEDAR at www.sedar.com.
ABOUT ENTRÉE RESOURCES LTD.
Entrée Resources Ltd. is a well-funded Canadian mining company with a unique carried joint venture interest on a significant portion of one of the world's largest copper-gold projects – the Oyu Tolgoi project in Mongolia. Entrée has a 20% or 30% carried participating interest in the Entrée/Oyu Tolgoi joint venture, depending on the depth of mineralization. Sandstorm Gold Ltd., Rio Tinto and Turquoise Hill are major shareholders of Entrée, holding approximately 16%, 9% and 8% of the shares of the Company, respectively. More information about Entrée can be found at www.EntreeResourcesLtd.com
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SOURCE Entrée Resources